The Stablecoin Sandwich: Building the Bank of the Future — Jorge Selva | Altitude

Cool. Thanks for joining uh in this lunch slot. Appreciate it. So, I'm going to keep this pretty pretty informal. Love questions at the end if you guys have it.

Um, as I was putting this together, I was thinking about how to kind of bridge the gap between the Salana and ETH worlds. So, I spent a lot of my career in Ethereum. Now, I'm working at Altitude, which started on uh Salana by virtue of building the squad smart accounts. And so generally this is kind of more of a thought around what matters when you're building uh onchain infrastructure whether it's banks or some form of business type accounts for uh people that are operating on chain. And so more than anything it's kind of like what we've learned along the journey and hopefully things that you can take away as you're building um also uh applications for for users for businesses as you go along.

And so I wanted to sound start with an example of a team that I actually spoke to a couple weeks ago and basically these guys were an operating company in Belgium but as many of us now work globally there's a need to pay people around the world whether it's onchain whether it's fiat rails uh and it it gets quite complex and so um in this case we had a team that um uh sorry they're incorporated in Canada the founders in Belgium um they have staff in four continents they're receiving royalties in Salana. Um, but just to kind of like simplify this this example, they're having to step through every one of these uh hoops essentially. So royalties come in, it goes to a multi-IG, they swap to USDC that then hits an exchange to off-ramp where they can finally pay somebody through a local bank. And so all these are basically moving through uh different products, different platforms. And so payroll is in in the mix.

wise and swift is is running uh there's a different card provider and ultimately for the accounting team for the founder this is a a giant nightmare um even on the personal side I don't know how many of you have used wise but recently um I think they've been hit with a lot of backups and delays I think since they've gone public they've been more strict on um flows of funds and so everybody that's dealing with onchain um money is feeling these pain points and realizes that there's a lot of value to be unlocked by moving operations and flows into um stable coins, which you know I think we all call the stable coin sandwich now. And so another example too is what we like to call the Saturday problem. And so uh we have a team that runs a significant amount of their business on meta ads. So they're spending tens of thousands of dollars a day, sometimes more. And for them to actually get those funds into uh a Visa or um a bank account that they can actually spend on Meta, it takes them uh sometimes on on the weekends their their account is depleted and they're not able to get funds operational.

They're not able to have those funds ready to actually deploy onto uh the ad networks. And so um for a business that is essentially at the mercy of banking hours, if the banks are closed and they can't get their funds moving, um that means the meta ads are off and that means that the business is slowing down. So for us at Altitude, uh we're actually seeing that um 12% of volumes are settling on weekends and I think this points to the need again for banking hours to be a relic of the past and moving us towards uh this world where stable coins allow us to to move things. um seamlessly regardless of time of day, day of week, etc. And so just to give you kind of the overview of of where where we've landed, but again for teams that are that are building what I like to think about like as the different like layers that that fit into this, whether you're building uh business accounts or consumer accounts, there are probably four distinct decisions and uh pillars that stand um stand underneath the the product experience that a user actually sees on the front end.

And for us, we kind of decided to build everything around the account. So the account as a primitive, whether you're in Ethereum building on a multisig account, whether it's safe or in Salana, in our case, we're building uh altitude on top of the squad's smart account program. The account is kind of where the balance lives, the like atomic unit that everything can plug into and distribute on the edges. Beyond that, obviously the providers, the rails, the agents, uh these all play into different um parts of the equation. So the providers uh we all probably have worked with a myriad of these um uh tools.

So the moon pays, the bridges, the reigns of the world, these are what gives us the the access to to visa rails to banking. um you know the providers and the rails are very well connected and then the agents are what unlock the uh actual seamless experiences on the front end for for users um to actually move funds to set programmatic rules around what can be done uh on their behalf and and by agents and yeah I think for anybody building a fintech I I know Alex from the Pulsar team is here are there any other people that are building consumer business apps that are kind of in the fintech space just curious guess what you guys are doing. Yeah. Maybe what are you what are you building? Okay.

You're working on a wallet. Okay. Um so I think wallets at the core, that's a great example where we also believe the same that wallets sit at the core of the user experience. And I'm curious for you guys like what um are you going for businesses, consumers? You have a specific vertical consumers.

Nice. Yeah. And so I think um can you tell me the name Rock? Okay, got it. Coins Subub.

And so um between you guys pulse pulsar money I think the um the unlock for for users for consumers for businesses that we're seeing is wallets sit at the core the balances sit in stable coins the end user shouldn't care whether they're dealing with uh USDC or euro like the underlying asset it's important to us as a business that provides something that is um reputable legible they understand it but at the end of the day they just want their money to move fast and they don't really care about um which accounts, which providers are tapping in at the edges. And so we're making that same bet where the wallet sits at the core, fiat plugs in at the edges, and this is kind of like the future state where we're moving away from like that intermediate bank that's taking a lot of the fees and and the um yeah, basically the the friction in the middle. So the stable coin first unlock um I was listening to a story about how wise came to be and essentially uh the founder found out basically got into the details of the correspondent banking system and realized that in that model you need a correspondent bank to sit in the middle to actually like provide liquidity for the local rails on either edge to actually send funds between euro and US dollars whatever it may be. And so they cut out the middleman and created wise. I feel like what we're all here to do in some sense with stable coins is similar in the sense that um the stable coin works as the uh the underlying asset that provides access to everybody globally but then creates like the additional layers which helps money move more seamlessly, more quickly.

Velocity is increased which then allows the autonomous uh agentic world to kind of flourish. And so what I think is really exciting is not only for customers and businesses, but the the unlock um I think really will come once we have agents working on our behalf. For example, if I'm a user, if I'm a consumer and I'm earning in US dollars but spending in euro, I should have an agent that can automatically rebalance for me um if the FX rate becomes favorable for me in in any case. Similarly with a business, if I have to pay out vendors and there are certain guard rails, there are rules around how an agent can execute on my behalf, that should happen without me needing to actually log into a wallet to execute a transaction to um kind of do that. So the the rules can be encoded on chain.

The agent can act programmatically on my behalf. And that's really possible only in a world where the wallet, the onchain wallet is kind of the primitive that allows that to to function without sitting on top of the traditional uh banking system. So I think this is probably just like uh for for people um that are that are building that are trying to figure out how to bring their products to market and how to differentiate. Um maybe just a learning from our side is all the first steps like matter obviously like making the KYB seamless um making the seams never show having like really good partner routing but ultimately what this is leading us towards is an understanding that um the reliance model in a world where you're sitting with stable coins at the center and then plugging in providers at the edges is you have to build the KYC the KYB in a way that's legible to providers so that they understand your processes, they understand the um infrastructure that you have around understanding who you're doing business with so that they can unlock this reliance model which allows them to turn on fiat rails to grant you access to cards and essentially help you move and onboard people um much more quickly over time. And so for me personally, like coming from the crypto world, building in the Ethereum space before I was at Altitude and in in Salana, I think we all want to move really quickly and think that we can just do things on chain and not have to worry about uh regulators about kind of this uh traditional infrastructure that has been set up uh so that governments understand where funds are flowing, ale mal risk is accounted for, etc.

And this reliance model I think really was an unlock that that we figured out where the providers that have access to these rails um they can work with you if you have a really strong system in place. And I think that that's what really allows you to move more quickly and seamlessly without the consumer being um even aware that this is happening under the hood. So exploring reliance models I think is is very very important. It might not be, you know, the most exciting part of what we do as builders, but I just wanted to flag that as something that we have found as a as a big win. Uh, and then yeah, just to flag I I wanted to quickly say that with accounts at the at the center with uh wallets and stable coin balances at the center plugging in providers whether we're running rails through Pix in Brazil, fast in Singapore, Interra in Canada, whatever it may be.

Um, we're working on some of these native rails, but being able to plug those in natively and seamlessly is kind of this global banking dream that I think we all have. The traditional banking model again requires people to requires companies to have licenses in these jurisdictions. It requires a more strong uh presence in terms of compliance and um understanding of who who these people who these rails are. But I think if we can plug into these, we'll start to see more um unlocks in terms of native networks emerging. I think we've seen experiments with uh you know competition to to the Visa Rails to card rails that didn't previously uh interact with with the onchain world.

And so I'm very bullish that what what we're building, what I think a lot of other teams are also building will allow us to um have banks and the edge rails be more comfortable with USDC, Euro C, all these stable coin balances that are sitting on the back end. So that's that's what I'm really excited about. And yeah, I think the the last part that I want to want to flag is on the agentic side. Um, I I wonder what the what the actual unlocks are going to be for customers. So whether you're talking to a business or or a consumer, uh, I was talking to Alex from the Pulsar Pulsar team earlier and we were trying to think about what some of these ways that people could have that a aha moment of what an agent can do on your behalf to get you excited about onboarding to a stable coin native application.

And I think that that's where we can really, you know, push a lot. So for for us at Altitude, uh, we speak to, uh, financial operators, CFOs, founders, and, you know, the boring parts of the business where you can close the books more quickly and keep things reconciled on a single ledger. That's what gets them excited. For consumers, it's very different. And uh I think experimentation and I'd love to see more teams pushing the boundaries of what can people uh see done in the real world real world for for them that brings them on chain that gets them excited about the agentic flows and and kind of gets us um to a world where we're all working on this like shared infrastructure.

So, I guess that's that's really my my my call and I've been talking to a lot of teams and I don't think anybody's um really cracked that that side that makes it very like easily uh legible or obvious to you know my parents or people that might not be uh as native. So whether you're building for uh consumers or businesses kind of a call to action to like bring those agents to life for people in a way that's uh exciting and um visible in a way that I don't think we've seen yet. Um, and yeah, I I talked about the Altitude agent. We're moving there to that to that world where the agent pays on your behalf. It can create payments.

It can approve it. Um, but this is all again uh possible because it's sitting on um a smart account that can have guardrails that can have execution environments that are um not just reliant on a single uh single signer, you know, single um form of uh you know, proposal execution of transaction on chain and um etc. So, um, want to just give a a quick overview of some of the learnings that we've seen at Altitude as as we've built some of these accounts and maybe hopefully, um, bring us all to a place where we're bringing more more teams, more users on chain and excited to see what you guys are building. Um, have some time for some some questions and would love to chat after this if anybody wants to speak more. So, thank you.

[applause]

Thanks, George. Uh, let's start the Q&A session. and